The App Store has become a very important business for Apple, as 26% of the company’s revenue comes from services. Lots of people download apps every day, but interestingly, there seems to be a new trend in the app market. Recent research shows that users are downloading fewer apps from the US App Store. However, this does not mean that developers make less money from their apps.
US App Store downloads are dropping
Research shared by intelligence firm Appfigures (via Techcrunch) reveals that some developers are seeing their app download numbers drop in the US App Store. Based on the Mobile Market Index, which tracks downloads and revenue for the top 25 apps in each App Store category, the number of downloads by August 31 was down 9% compared to the same period in 2022.
Exactly a year ago, the mobile phone download index reached 91.87 points, while this year the index fell to 83.59 points. Appfigures reports that last year’s number was indeed lower than 2018’s, but not by much. This time, the difference was more significant.
During this past holiday season, the index topped 95, which isn’t surprising given that there are a lot of new people buying Apple products as Christmas gifts around December. However, the downloads then dropped to 64.50 in April 2023. The number of downloads returned to more regular levels over the summer.
According to the intelligence firm, the decline in App Store downloads is more related to a loss of interest and market saturation with news, games and entertainment apps. However, some categories did well, such as productivity apps, which grew nearly 70% over the past year.
App revenue is growing
Despite the decline in App Store downloads, it seems that developers are actually making more money from their apps. AppFigers reports that the revenue index has grown from 363.13 points to 458.3 points since 2018. “Revenue growth has far outpaced the slowdown in downloads as more developers focus on monetization,” the company explains.
In other words, even though people are downloading fewer apps, they are also spending more money within the apps they already have.
Apple reported more than $21 billion in revenue from services during the third fiscal quarter of 2023. Although the category also includes Apple’s own services, the vast majority of them come from the App Store. The company also passed the 1 billion paying subscribers mark last month.
And as new iPhones and the holiday season approach, developers will once again have the opportunity to attract new users and boost their app downloads.
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